Germany’s War on the War on Terror

Terrorist financiers: good. Tax evaders: bad.

John Rosenthal

March 29, 2010, Vol. 15, No. 27

Last month, the European parliament rejected the so-called SWIFT agreement, which would have permitted American terrorism investigators to continue inspecting data on international financial transactions originating from European banks. The members of parliament thus shut down a program that French investigative judge Jean-Louis Bruguière concluded was a “vital counter-terrorism tool,” which had proved its worth in both elucidating terror attacks and preventing them.

Officially known as the Terrorist Finance Tracking Program (TFTP), it was set up by the Bush administration after the 9/11 attacks. In a report submitted to the EU, Judge Bruguière listed several terror acts that had been thwarted with the help of it: among them, the 2006 U.K.-based plot to bring down transatlantic airliners using liquid explosives, the 2007 “Sauerland cell” plot to bomb American military installations in Germany, and the 2007 plot to blow up New York’s John F. Kennedy Airport. Among the plots that the TFTP has helped investigators to elucidate, the report mentions the 2002 Bali bombings, the 2004 Madrid train bombings, the 2005 London transport bombings, and the 2008 Mumbai attacks. The arrest of Riduan Isamuddin—the reputed “Bin Laden of Southeast Asia”—was reportedly facilitated by the program.

The SWIFT agreement is so-named for the Society for Worldwide Interbank Financial Telecommunication, a Brussels-based consortium of banks. In voting down the agreement, the European parliament made use of powers freshly accorded it under the Lisbon Treaty. The vote has thus been hailed in the European media and in the halls of the parliament itself as a triumph of “European democracy.” The fact that the vote was held anonymously, with no record of the votes of individual MEPs being made public, suggests that European democracy still has a ways to go.

Despite the anonymous voting procedure, however, the boisterous run-up to the vote left no doubt about the leading role played by German MEPs of all political persuasions in killing the agreement. That German Social Democrats, Greens, and the “post-Communist” Left party opposed the agreement will come as no surprise. “This agreement . . . breathes the spirit of the security ideology of the United States of America,” the leader of the Socialists in the European parliament, Martin Schulz, thundered during a debate the day before the vote, “but it does not breathe the spirit of the protection of the fundamental rights that we as European deputies must guarantee for the citizens of this continent.”

The European People’s party (EPP), by far the largest group in the parliament, supported the agreement, as did the smaller European Conservatives and Reformists group, which includes Britain’s Tories. So too did the Socialist government of Spain, which currently holds the EU’s rotating presidency. Speaking on behalf of the presidency during the debate, Spain’s minister of the interior, Alfredo Pérez Rubalcaba, pleaded—albeit somewhat apologetically—for approval of the agreement.

The key to the defeat of the SWIFT agreement was thus the defection from the EPP mainstream of the German MEPs of Angela Merkel’s Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU). As the Frankfurter Allgemeine Zeitung noted, the votes of conservative MEPs combined with those of “renegade” Spanish socialists might have sufficed for a majority in favor, “were it not for the German ‘Union’ deputies.”

On January 31, just days before a crucial vote in the parliament’s committee on civil liberties, justice, and home affairs, Manfred Weber of the CSU flagged his opposition in an op-ed titled “No Transfer of Bank Data!” in Germany’s mass-market tabloid Bild. In terms essentially indistinguishable from those of his Social Democratic colleague Schulz, Weber wrote, “For the data of European citizens, we deputies want European data protection standards.” On February 4, the committee recommended the rejection of the agreement. Werner Langen, the chairman of the CDU/CSU delegation in the parliament, likewise inveighed against the agreement. Insisting on the need for greater parliamentary input, Langen said, “Such a far-reaching agreement that encroaches on the rights of citizens cannot come to pass without public parliamentary consultation.”

The need to negotiate an access agreement emerged following the decision of the SWIFT consortium to shut down its U.S. servers and store all relevant data at European locations. In July of last year, the European Council, representing the 27 EU member states, announced its intention to negotiate the required agreement with the United States. The mere prospect of negotiations sparked frenzied reactions across the German political spectrum.

CSU chairman Horst Seehofer spoke of a “scandal” and described the negotiation plans as “absolutely preposterous.” The Franco-German Green MEP Daniel Cohn-Bendit—the legendary “Dany the Red” of May ’68 fame—warned of an impending “putsch” in the European parliament. The head of Germany’s Free Democratic party (FDP) Guido Westerwelle—presently, the German foreign minister—insisted that the plan “must be stopped.”

As echoed in the later remarks by Langen, one ostensible source of the outrage was the alleged bypassing of the European parliament by the council and the European Commission. Under the pre-Lisbon rules, the parliament did not have a right of co-decision in the matter. But that it was hardly the aim of the council to bypass the parliament is made abundantly clear by the fact that the negotiating mandate only concerned an interim agreement. The latter was supposed to remain in effect while a final agreement was negotiated and submitted for the parliament’s approval under the new Lisbon arrangements. It was this interim agreement—scheduled to run only until October 31 of this year—that the parliament rejected last month, opening up precisely the sort of security breach that the interim arrangement was designed to avoid.

While the German government had consented to negotiations on the agreement in July 2009, it is notable that when the completed agreement was approved by the European Council four months later, Germany abstained. As the council decision required unanimity, a German “no” would have killed the agreement then and there. But rather than bearing the onus of having torpedoed a crucial transatlantic security arrangement, the German government by its abstention simply handed off the issue to “Dany the Red,” Werner Langen, and the other “putschists” in the European parliament.

German opposition to the TFTP is couched in terms of privacy concerns and “data protection.” The opponents virtually never specify any concrete damage that an unsuspecting bank client might be expected to suffer on account of the program. After the parliament vote, U.S. State Department spokesperson Philip J. Crowley showed deference to this line of argument by knowingly observing, “It’s no secret that Europe and the United States approach privacy issues differently.” The general tone of the German opposition was captured by the Berliner Zeitung, which snippily titled a July 2009 report on the SWIFT negotiations “So Much for Bank Secrecy.”

But the fact of the matter is that the German government itself, in the name of combating tax evasion, has for many years now been conducting a veritable crusade against the confidentiality of bank client data. In the latest episode in this crusade, Chancellor Merkel recently endorsed the purchase of stolen Swiss bank data by state-level German tax authorities. (The decision was announced in early February, just a week before the EU parliament vote on the SWIFT interim agreement.) The data thief is reported to have been paid the equivalent of $3.4 million. Shortly thereafter, German finance minister Wolfgang Schäuble summarily declared to the Swiss press, “We will eliminate bank secrecy . . . in Europe.” Schäuble is a leading member of Merkel’s Christian Democratic Union.

Two years earlier, the German foreign intelligence service, the BND, had purchased data stolen from the Liechtenstein-based LGT Bank. The purchase led to, among other things, a televised police raid on the home of Klaus Zumwinkel, one of Germany’s best-known business executives and now its most famous tax evader. Not only did the BND pay the data thief the equivalent of $5.5 million. According to reports in the German media, it also furnished him with a new identity. One can only conclude that in the eyes of both of Germany’s leading political parties, it is good and righteous for Germany to violate a bank client’s expectation of confidentiality in the name of combating tax evasion and topping up the coffers of the German treasury, but it is bad and evil for the United States to do the same in the name of combating terrorism and saving lives.

In early March, in yet another decision that will undermine international counterterrorism efforts, Germany’s constitutional court overturned a law requiring telecommunications firms and Internet access providers to retain basic client usage data for six months. The German law merely served to implement the minimum requirement laid out in a 2006 European Union directive. In an act of defiance vis-à-vis the authority of the EU, the court ordered the data to be deleted—some of it “immediately.”

Much of the data covered by the EU directive is information that is automatically generated by telecommunications firms as a matter of course for technical and administrative reasons. It has nothing to do with surveillance. Although it obviously can become highly relevant to criminal and/or counterterrorism investigations, under normal circumstances it will not be consulted by anyone ever. Nonetheless, the German court argued that the mere existence of the data “creates a diffuse threatening feeling of being observed.”

Well, if telephone or Internet users in Germany experience the “threatening feeling of being observed,” it is likely because they really are being observed. German law enforcement authorities are able to employ wiretaps and other forms of electronic surveillance with an ease that would make their American counterparts green with envy. In 2007, nearly 1 million phone calls were monitored by police in Berlin alone. Over 1,000 Berlin residents were the targets of wiretaps. A 2003 study conducted by Germany’s Max Planck Institute for Foreign and International Criminal Law found that wiretaps are used by law enforcement authorities some 30 times more frequently in Germany than in the United States.

The same study found that only 0.33 percent of the German wiretaps were associated with subsequent prosecutions and convictions. This is one-fifth of the corresponding figure for American wiretaps. Taken together, the statistics strongly suggest that German authorities make a broad practice of monitoring the telecommunications of generically “suspicious” persons without having to meet anything near the probable cause standards that obtain in the United States.

What is perhaps most startling about the German opposition to the SWIFT agreement, however, is the seemingly total indifference of the opponents to the reality of terrorist financing and the threat that European jihadist networks represent.

As was already made clear by the 9/11 attacks, Germany itself has been a major hub of jihadist activism and terror financing. Americans will largely be aware of the Hamburg cell and of the three suicide pilots—Mohammed Atta, Ziad Jarrah, and Marwan al-Shehhi—who came from Germany to America to train for and carry out the attacks. But they might be less aware that even after the arrival of the trio in the United States, their Hamburg cell co-conspirator Ramzi Binalshibh continued to play a crucial role in facilitating the attacks from German soil. Among other things, he did so, notably, by transferring funds.

It was indeed the discovery of Binalshibh’s Hamburg phone number among Zacarias Moussaoui’s personal affairs that would allow investigators to connect Moussaoui to the 9/11 plot. Binalshibh is known to have transferred $14,000 to Moussaoui in America. Binalshibh is also suspected of having been involved in the planning of the October 2000 attack on the USS Cole. He had lived in Germany since the mid-1990s.

At Moussaoui’s 2006 trial, FBI agent Michael Anticev complained about the lack of cooperation of German authorities with American counterterrorism investigations. Asked whether it was difficult to obtain phone records from Germany in 2001, Anticev replied, “Extremely, extremely.” He explained, moreover, that phone numbers that were furnished would often be truncated, the last “three or four digits” having been dropped off. Asked whether obtaining financial records was equally difficult, Anticev replied that it was “a little bit easier,” but that the process was “not automatic” and, in any case, typically took “months.”

In September 1998—at a time when, under the chancellorship of Helmut Kohl, German officials were more cooperative—al Qaeda financier and cofounder Mamdouh Mahmud Salim was arrested near Munich while on a visit to Germany. Also known as “Abu Hajer al Iraqi,” he would subsequently be extradited to the United States to face trial for his role in the August 1998 terrorist attacks against American embassies in Africa.

Two other well-known al Qaeda financiers remain free men in Germany. Mamoun Darkazanli held power of attorney over a joint German bank account with Salim. In a 2002 report on terror financing prepared for the U.N. Security Council, Jean-Charles Brisard stated that Darkazanli provided “financial and logistical support” to the Hamburg cell. Darkazanli is also suspected of involvement in the African embassies plot. He is on both the U.S. and U.N. lists of terrorist persons and entities. He is wanted by Interpol. And he is under indictment in Spain. The 2005 Spanish indictment describes him as “the permanent interlocutor and assistant of Osama bin Laden in Germany.”

German prosecutors have themselves confirmed Darkazanli’s activities on behalf of al Qaeda, but they have somehow managed to conclude that these activities are “without criminal relevance.” German authorities have not only declined to bring charges against Darkazanli, but have also refused to extradite him to face charges abroad.

The case of Reda Seyam, a naturalized German citizen of Egyptian origin, is perhaps even more astonishing. Seyam is widely believed by intelligence sources and terror experts to have organized the financing for the 2002 Bali bombings, which killed over 200 people. He had already been arrested by Indonesian authorities on suspicion of involvement in terrorist activity several weeks before the attacks.

After his arrest, Germany’s Federal Crime Bureau (BKA) dispatched agent Michael von Wedel to Indonesia to investigate the charges. In his 2008 memoir Die Abrech-nung (“Settling Accounts”), von Wedel described how his investigations would confirm Seyam’s involvement in jihadist financing in Southeast Asia. But he also described how his own assignment in Indonesia morphed from investigating Seyam into protecting him from possible “rendition” by the CIA. In July 2003, a BKA team whisked Seyam safely home to Germany. German authorities have never brought charges against him.

Since his return, incidentally, Seyam has made no secret of his jihadist convictions. He has, for instance, told a reporter that Muslims have an “obligation to kill kafir [unbelievers]” and even named one of his many children “Jihad.” In a documentary that was broadcast by Germany’s ARD public television in February 2007, Seyam explained that al Qaeda “is fighting for the good cause.” Asked what he thought of al Qaeda terror attacks, he replied, “No comment” and then broke into a broad mischievous grin.

Another prominent member of the rogues’ gallery of terror facilitators who have operated out of Germany is Christian Ganczarski. The German convert to Islam is presently serving an 18-year prison sentence in France for membership in a terrorist organization—al Qaeda—and complicity in the 2002 Djerba synagogue bombing. Shortly before the attack, the suicide bomber called Ganczarski at his home in North Rhine-Westphalia to ask for his blessing. We know this, because German police were listening in on the conversation. But German prosecutors never saw fit to bring charges against Ganczarski. In June 2003, he made the mistake of changing planes in Paris while on a trip from Saudi Arabia to Germany. The French police were waiting for him. Otherwise, he might never have been brought to justice.

When it emerged that one of the suspects arrested in March 2004 in the aftermath of the Madrid train bombings had previously spent time in Darmstadt, the Frankfurter Allgemeine Zeitung ran a slightly defensive article with the telling headline “There Is Always a Clue that Leads to Germany.” It would later turn out that no less than the presumed mastermind of the attacks, Rabei Osman Sayed Ahmed, had moved to Spain from Germany in September 2001.

How many of the clues uncovered by the Terrorist Finance Tracking Program led to Germany? We probably will never know. We do know that American law enforcement officials tipped off their German counterparts about the Sauerland cell. Would the plotters’ envisioned inferno at the American Air Force base in Ramstein have come to pass were it not for the TFTP? The 2006 U.K.-based transatlantic airliners plot is also reported to have had a German connection.

Now, however, it appears that there are to be no more clues. As a consequence of the annulment of the SWIFT agreement—as well indeed as the German Constitutional Court’s quashing of the data retention law—Germany is sure to become an even more secure haven for terrorists and their financiers than it already has been. And, as we know, when Germany is a safe haven for terrorists and terror financing, it is a danger for the United States and the rest of the world.

There remains one mysterious detail in Judge Bruguière’s report that urgently requires clarification from the Obama administration. The report notes that in 2009 one country was already removed from the scope of TFTP data requests. It is difficult to see why any country should be excluded from the scope of the program, and it is hard to imagine that any country would be excluded unless it had requested to be so. If the Obama administration has already removed Germany from the scope of the TFTP, then the administration’s ostensible efforts to defend the program are nothing but a farce.

John Rosenthal writes regularly on European politics and transatlantic relations for various both old and new media. More of his work can be found at the Transatlantic Intelligencer blog (www.trans-int.com).